Information agency Credinform offers a ranking of the largest Russian hydropower enterprises. The companies with the largest volume of annual revenue (TOP-10) were selected for the ranking, according to the data from the Statistical Register for the latest available periods (for 2015 and 2016). Then they were ranked by asset turnover ratio in 2016 (Table 1). The analysis is based on data of the Information and Analytical system Globas.
Asset turnover is calculated as a relation of sales proceeds to the average value of company's total assets for a period. The indicator refers to the group of activity ratios and characterizes the efficiency of use by a company of all available resources, apart from sources of their attraction. The ratio shows how many times a year the full cycle of production and circulation completes, which yields profit.
The experts of the Information agency Credinform, taking into account the actual situation both in the economy as a whole and in sectors, has developed and implemented in the Information and Analytical system Globas the calculation of practical values of financial ratios that can be recognized as normal for a particular industry. For companies on production, transmission and distribution of electrical power the practical value of the asset turnover ratio was from 0,61 in 2016.
For getting of the most comprehensive and fair picture of the financial standing of an enterprise it is necessary to pay attention to all combination of indicators and financial ratios.
|Name, INN, region||Revenue, mln RUB||Net profit, mln RUB||Asset turnover, times||Solvency index Globas|
INN 6143079313 Rostov region
|NUGUSHSKII GIDROTEKHNICHESKII UZEL LLC
INN 0263015092 Republic of Bashkortostan
|42,2||44,2||0,1||1 797,0||3,98||3,532||258 Medium|
|VILUI HYDROELECTRIC STATION-3 NJSC
INN 1433015048 Republic of Sakha ( Yakutia)
|2 364,0||4 279,2||770,1||898,3||0,17||0,32||175 High|
|MAMAKANSKAYA GES NJSC
INN 3802010707 Irkutsk region
|NORD HYDRO NJSC
INN 7801435581 Republic of Karelia
|KAMCHATSKII GAZOENERGETICHESKII KOMPLEKS PJSC
INN 4101047002 Kamchatka territory
|BOGUCHANSKAYA GES PJSC
INN 2420002597 Krasnoyarsk territory
|14 653,7||16 149,1||4 678,3||5 104,6||0,18||0,19||186 High|
INN 4908000718 Magadan region
|2 057,9||2 395,5||16,8||163,6||0,12||0,14||238 Strong|
|Federal Hydro-Generating Company – RusHydro PJSC
INN 2460066195 Krasnoyarsk territory
|107 099,0||115 033,0||30 022,0||41 877,0||0,12||0,13||162 Superior|
|KRASNOYARSKAYA GES NJSC
INN 2446000322 Krasnoyarsk territory
|18 597,0||4 931,6||10 243,0||4 843,3||0,40||0,09||187 High|
|Total by TOP-10 companies||146 263,5||143 914,0||45 845,5||54 732,7|
|Total by TOP-10 companies||14 626,3||14 391,4||4 584,6||5 473,3||0,87||0,92|
|Industry average value||1 012,8||1 110,5||22,7||94,5||0,59||0,61|
The average indicator of the asset turnover ratio of TOP-10 companies in 2016 is above the practical value. Two from TOP-10 enterprises have the ratio value above the practical one and eight enterprises - below. Five from the TOP-10 companies reduced revenue or net profit indicators in 2016 in comparison with the previous period or have a loss (are marked with red filling in columns 3 and 5 in Table 1).
The industry average values of the asset turnover ratio tend to decline over the past ten years. It can point to a gradual fall of companies’ business in this field of activity (Picture 2).
Eight from TOP-10 companies got the Superior and High or Strong and Medium solvency index Globas , that testifies to their ability to repay their debt obligations timely and fully.
GIDROSPETSSTROIMONTAZH LLC and NORD HYDRO NJSC got Adequate solvency index Globas, due to the information on their participation as defendants in arbitration cases. The forecast for the development of indices is stable.
Information agency Credinform represents an overview of trends in the field of cast iron, steel and ferroalloys production.
Enterprises with the largest volume of annual revenue (TOP-10 and TOP-500) were selected for the analysis, according to the data from the Statistical Register for the latest available periods (for 2015 and 2016). The analysis was made on the basis of the data of the Information and Analytical system Globas.
Legal forms and unreliable data
The most spread legal form of enterprises in the industry is a limited liability company. Public joint-stock companies and Non-public joint-stock companies also make a significant part. (Picture 1).
According to the results of investigation of the Federal Tax Service of the RF, 8,4% of companies in the industry have records of unreliable data entered into the Unified State Register of Legal Entities. (Picture 2).
The revenue of 10 industry leaders made 79% of the total revenue of 500 the largest companies in 2016. It points to a sufficiently high level of competition in the industry. PJSC Magnitogorsk Iron & Steel Works became the largest company in terms of revenue in 2016 (Picture 3).
The best results in the industry in terms of revenue for the ten-year period were achieved in 2016. During the crisis periods in the economy in 2007 -2008 and 2010-2012 there was a decline in the industry average indicators. (Picture 4).
Profit and loss
The volume of profit of 10 industry leaders made 93% of the total profit of TOP-500 companies in 2016. The leading position in terms of profit volume in 2016 is taken by PJSC SEVERSTAL (Picture 5).
Industry average values of the profit indicators of companies in the industry for the ten-year period are not stable. Decrease in indicators was observed in 2007 - 2009, 2011 - 2013 against the background of crisis phenomena in the economy. In recent years, there has been a significant growth in indicators, which correlates with revenue figures. The industry showed the best results in 2016 (Picture 6).
There were 128 loss-making enterprises observed in 2015 among TOP-500 companies. In 2016 their number increased to 115 or by 10%. At the same time, the average size of their loss increased by 52%. For the rest of TOP-500 companies the average profit margin increased by 53% for the same period (Picture 7).
Key financial ratios
Over the ten-year period the average industry indicators of the total liquidity ratio were during 8 years below the interval of recommended values – from 1,0 to 2,0. (marked in yellow in the Picture 8).
The total liquidity ratio (the relation of the amount of current assets to short-term liabilities) shows the sufficiency of company’s funds for repayment of its short-term liabilities.
Solvency ratio (the relation of the amount of own capital to the balance sum) shows the company's dependence on external borrowings. Recommended value is > 0.5. The value of the ratio below the minimum value means a strong dependence on external sources of funds’ receipt.
The experts of the Information agency Credinform, taking into account the actual situation both in the economy as a whole and in sectors, has developed and implemented in the Information and analytical system Globas the calculation of practical values of financial ratios that can be recognized as normal for a particular industry. For companies in the field of the extraction of cast iron, steel and ferroalloys production the practical value of the solvency ratio is from 0 to 0,61 in 2016.
Over the ten-year period the industry average indicators of the ratio were below the recommended value and in the range of practical values, except for the period from 2011 to 2013, when negative values were observed (Picture 8).
However, starting from 2014, the figures of both coefficients has improved significantly.
For the last ten years, the instability of return on investment ratio was observed. In periods of crisis phenomena in the economy (from 2007 to 2009 and in 2011), the indicators decreased up to negative values (Picture 9). The ratio is calculated as the relation of net profit to the sum of own capital and long-term liabilities and demonstrates the return on the equity involved in the commercial activity and the long-term borrowed funds of an organization.
Within the same period the products profitability ratio was rather stable (Picture 9). The highest indicators were since 2014. The ratio is calculated as the relation of profit from sales to expenses for ordinary activity. In general, profitability reflects the economic efficiency of production.
Indicators of the asset turnover ratio over a ten-year period demonstrate trend to decline (Picture 10).
Asset turnover ratio is calculated as the relation of sales proceeds to the average value of total assets for a period and characterizes the efficiency of use of all available resources, regardless of the sources of their attraction. The coefficient shows how many times a year a complete cycle of production and circulation is made, yielding profit.
Equity turnover ratio is calculated as the relation of revenue to average annual amount of equity and shows the intensity of use of the whole part of assets.
There is a significant decrease in the indicators of this ratio since 2011 (Picture 10).
A third of companies in the TOP-500 have a broad specialization in cast iron, steel and ferroalloys production (Picture 11).
Dynamics of business activity
Over the 25-year period, the registered companies from TOP-500 list are unequally distributed by the year of foundation. The largest number of enterprises in the industry was established in 2014 (Picture 12).
Business took the greatest interest to cast iron, steel and ferroalloys production in the period after 2010. (Picture 13).
Main regions of activity
The companies of the industry are unequally distributed across the country. Their largest number is registered in Moscow, Sverdlovsk and Chelyabinsk regions (Picture 14). On one hand, this may be connected with the tendency to register head offices of companies in the country's largest financial center. On the other hand, Sverdlovsk and Chelyabinsk are regions with a historically established foundry infrastructure.
TOP-500 companies are registered in 60 regions of Russia.
The great majority of companies in the industry is concentrated in the Central Federal District of the country (Picture 15).
The share of companies with branches or representative offices from TOP-500 enterprises is 6,6%.
Activity of participation in arbitration proceedings
The majority of companies of the industry either do not participate in arbitration processes at all, or participate not actively (Picture 16).
In terms of the presence of signs of «fly-by-night companies» or unreliable organizations, the great majority of enterprises of the industry demonstrate an extremely low risk of cooperation (Picture 17).
Financial position score
An assessment of the financial position of companies in the industry shows that the more than a third of enterprises are in an unstable and critical financial situation, and the same number are stable (Picture 18).
Almost a third of companies of the industry (31%) show the highest level of bankruptcy risk in the short-term period (Picture 19).
Solvency index Globas
Thus, a comprehensive assessment of enterprises on cast iron, steel and ferroalloys production, taking into account the main indices, financial indicators and ratios, points to unfavorable trends in this field of activity up to 2013. However, in recent years, the situation in the industry has begun to improve.